In order to maintain a top score on the Index, a record number of companies moved to provide comprehensive healthcare coverage to their transgender workers.

The release of the Human Rights Campaign Foundation’s Corporate Equality Index (CEI) is eagerly awaited in the LGBT community because it’s a barometer of progress that indicates just how well businesses are treating their LGBT employees. Even more noteworthy is that the trend of progress makes it clear to lawmakers at every level of government aware that private enterprise has not suffered by treating all of its employees with respect and equal access to benefits in supportive environments.

There is a long way to go, but the overall progress is nothing short of remarkable.

[T]he 2012 CEI chronicles the remarkable advances that have taken place on behalf of lesbian, gay, bisexual and transgender equality (LGBT) in the workplace since 2002. In the first year of the CEI, only 13 businesses achieved a top score. This year, 190 corporations, across industries, geographies and size, will receive a 100 percent score on significantly more stringent criteria, including 10 of the top 20 Fortune-ranked companies. As companies compete to recruit and retain the best employees and influence consumer choices, CEI ratings have redefined the norm for how all companies treat LGBT workers and their families. The result is that the lives of millions of LGBT Americans have been made exponentially better, public acceptance of issues important to LGBT people has soared and both public and private employers of all sizes have voluntarily adopted inclusive policies.

This year’s report’s findings:

While the inclusion of sexual orientation in non-discrimination policies has become a standard since 2002, the addition of gender identity is now part of the policies of 50 percent of Fortune 500 companies for the first time, a growth rate of 1567 percent since 2002.

The number of Fortune 500 companies offering domestic partnership benefits has increased by 76 percent since 2002.

The greatest strides have come in area of transgender-inclusive healthcare coverage. As a result of new criteria instituted by HRC this year that is a requisite to a perfect score, companies offering comprehensive healthcare coverage to their transgender workers has increased to 207 from 85 last year and 49 in 2009.

The CEI rates companies on 40 specific policies and practices, 32 of which are new or more demanding this year. To achieve a perfect score and the coveted distinction of “Best Places to Work for LGBT Equality,” companies must have fully-inclusive equal employment opportunity policies, provide equal employment benefits, demonstrate organizational LGBT competency, evidence their commitment to equality publicly and exercise responsible citizenship.

Raising the bar: transgender health coverage

What has always been a hurdle — and goal — for corporate progress has been the handling of transgender health coverage. Companies that have maintained a perfect score to date, under HRC’s new scoring system, were now going to fall short if they did not provide equal health care access for transgender workers for the 2012 Index. Part of the difficulty with achieving that score has another rate limiting factor — some health care insurers used by CEI companies do not have policies or packages to offer that cover gender reassignment surgery or other trans-related medically necessary care. A task force has been created to address this going forward.

Three years ago, HRC embarked on an ambitious project to raise the bar on its rating criteria so that a 100 percent score would reflect the ‘best in class’ practices of LGBT inclusion in the workplace. This year’s CEI tells a powerful story of American businesses working to meet that higher bar.

Beginning in 2006, the CEI credited participants if they offered at least one benefit related to gender transition. As a result, 487 companies or 79 percent of participants received credit for this category. In 2009, HRC informed companies that it would begin rating them in 2012 on equal health coverage for transgender individuals without exclusion for medically necessary care, to include sexual reassignment surgery. The fact that companies would be rated on this new criterion dramatically increased performance from 85 companies offering all of the benefits last year to 207 this year, a 144 percent increase.

To support employers in their efforts to obtain healthcare coverage for their transgender employees, and specifically to address the gap between the current product offerings and accepted medical practice, HRC has launched an “Insurance Equality Task Force” which will engage and challenge the insurance industry to provide products their customers need to be competitive and that meet the needs of LGBT consumers. The task force brings together top CEI company representatives, insurance experts and other key stakeholders in a shared commitment to end discrimination against transgender individuals and to expand access to this coverage. The main objective of this task force is to facilitate the development and availability of health plans and insurance products that provide coverage of medically necessary treatment for transgender individuals in accordance with accepted medical standards.

A total of 850 businesses have been rated in the 2012 CEI, including the entire Fortune 500. Two-hundred seventy-seven Fortune 500 companies voluntarily submitted surveys; the remaining 214 were rated based upon publicly-available data. In addition, 65 Fortune 1000 companies, 134 law firms and 160 other companies voluntarily participated in the 2012 CEI. Voluntary participation in the CEI has doubled since its inception. In 2002, 319 companies participated; this year 636 companies have participated.

In spite of the fact that 77 percent of the American public favors the Employment Non-Discrimination Act, there are no federal laws barring workplace discrimination on the basis of sexual orientation and gender identity. Americans can also still be fired in 29 states on the basis of their sexual orientation and in 34 states on the basis of their gender identity. According to a November 2011 HRC/Greenberg Quinlan Rosner Research poll, a staggering 87 percent of the American public believes that it is already illegal under federal law to fire someone for being gay and 78 percent believe that it is illegal under state law.

“Corporate America is leading the charge for equality in the workplace,” said HRC President Joe Solmonese. “We commend the businesses that participated in the CEI. They understand that LGBT-inclusive workplace policies are the right thing to do and good business practices.”

Among the corporations that expanded their insurance coverage this year are Apple, Chevron, General Mills, Dow Chemical, American Airlines, Kellogg, Sprint, Levi Strauss, Eli Lilly, Best Buy, Nordstrom, the U.S. division of Volkswagen, Whirlpool, Xerox, Raytheon and Office Depot.

Frantz Tiffeau, senior manager of supply chain diversity at Florida-based Office Depot, said the decision to cover transgender surgery was made by senior executives who understood the procedures to be medically indicated, not elective. The office supplies company already had had employees change genders, before the new health plan was adopted.

“Realistically, we just looked at it as a necessity,” Tiffeau said. “Our executive V.P. said, `It’s the right thing to do, it’s something we support and we have employees who have this need.”

In other words, they have to compete to recruit and retain top talent, and these top-performing companies in the Index have made it part of their core business plan to provide the non-discrimination policies and employee benefits that are providing islands of equality for LGBTs in states where there are no protections (take North Carolina, home to many pro-LGBT businesses and private employers with such policies, some even providing same-sex spousal equivalent benefits).